[ EDITORIAL ]

Debt Reduction: Take Time For Wise Decisions

Published: Saturday, January 19, 2013 at 12:08 a.m.

Last Modified: Saturday, January 19, 2013 at 12:08 a.m.

Just as a village cannot be saved by destroying it, the U.S. economy cannot be rescued by letting the nation default on its debts.

Yet Republican hard-liners are threatening to do so by refusing to raise the debt ceiling unless Democrats immediately agree to new cuts — cuts that, if taken too far, could set back the economic recovery.

One might say that President Barack Obama and the Democrats share blame in this confrontation by ignoring the need to trim the cost of entitlements to ensure their longevity, and certainly they have their faults.

However, as Obama points out, the programs in question — Social Security, Medicare and Medicaid — make it possible for the nation's elderly, disabled and poor residents to maintain their health and avoid destitution. They should be made strong fiscally, but not by weakening them functionally.

Washington must come to a long-term agreement on how to balance spending reductions and tax levels, as well as grow the economy — which is the key to sustainability.

However, such difficult and elusive agreements take time and a spirit of cooperation. That negotiating climate does not exist at the moment. Instead, there is enormous political tension as the U.S. runs out of its borrowing authority.

Washington should ratchet down the tension. Drop the partisan, inflammatory stances, raise the statutory debt ceiling, and commit to hammering out a long-term approach to reducing nation's debt and solidifying its social safety-net programs.

While escalating national debt as a percentage of gross domestic product is no way to stay a prosperous country, the debt is not a crisis unless we panic ourselves into one.

Created over many years and swollen by the devastating 2008-2011 recession, the federal debt represents a long-term policy challenge requiring gradual, sustained spending discipline and economic growth.

NATIONAL RESOLVE

What Washington must do is show that it has the resolve to make genuine fiscal reform, while also living up to its commitments.

What leaders must avoid is hinting, to edgy financial markets, that the U.S. would actually consider defaulting. That would be irresponsible — the same destructive course taken 18 months ago, which contributed to the historic downgrade of the U.S. credit rating.

As Obama warned Monday, default could send the nation into a new recession.

Think of the tremendous hardship this would impose on countless U.S. families — some of whom have not recovered from the Great Recession.

If a new wave of economic contraction occurs, think of the lost jobs and opportunities that would ensue. These aren't mere dollars — these are the lives and futures of our fellow Americans.

Washington should stop this game of financial chicken and do the right thing: Raise the statutory debt ceiling now, then commit to tackling fiscal reform in a responsible manner.

<p>Just as a village cannot be saved by destroying it, the U.S. economy cannot be rescued by letting the nation default on its debts.</p><p>Yet Republican hard-liners are threatening to do so by refusing to raise the debt ceiling unless Democrats immediately agree to new cuts — cuts that, if taken too far, could set back the economic recovery.</p><p>One might say that President Barack Obama and the Democrats share blame in this confrontation by ignoring the need to trim the cost of entitlements to ensure their longevity, and certainly they have their faults.</p><p>However, as Obama points out, the programs in question — Social Security, Medicare and Medicaid — make it possible for the nation's elderly, disabled and poor residents to maintain their health and avoid destitution. They should be made strong fiscally, but not by weakening them functionally.</p><p>Washington must come to a long-term agreement on how to balance spending reductions and tax levels, as well as grow the economy — which is the key to sustainability.</p><p>However, such difficult and elusive agreements take time and a spirit of cooperation. That negotiating climate does not exist at the moment. Instead, there is enormous political tension as the U.S. runs out of its borrowing authority.</p><p>Washington should ratchet down the tension. Drop the partisan, inflammatory stances, raise the statutory debt ceiling, and commit to hammering out a long-term approach to reducing nation's debt and solidifying its social safety-net programs.</p><p>While escalating national debt as a percentage of gross domestic product is no way to stay a prosperous country, the debt is not a crisis unless we panic ourselves into one.</p><p>Created over many years and swollen by the devastating 2008-2011 recession, the federal debt represents a long-term policy challenge requiring gradual, sustained spending discipline and economic growth.</p><p>&nbsp;</p><p><strong>NATIONAL RESOLVE</strong></p><p>What Washington must do is show that it has the resolve to make genuine fiscal reform, while also living up to its commitments.</p><p>What leaders must avoid is hinting, to edgy financial markets, that the U.S. would actually consider defaulting. That would be irresponsible — the same destructive course taken 18 months ago, which contributed to the historic downgrade of the U.S. credit rating.</p><p>As Obama warned Monday, default could send the nation into a new recession.</p><p>Think of the tremendous hardship this would impose on countless U.S. families — some of whom have not recovered from the Great Recession.</p><p>If a new wave of economic contraction occurs, think of the lost jobs and opportunities that would ensue. These aren't mere dollars — these are the lives and futures of our fellow Americans.</p><p>Washington should stop this game of financial chicken and do the right thing: Raise the statutory debt ceiling now, then commit to tackling fiscal reform in a responsible manner.</p>